May 22

#34: They Might Just Pay It! (Throwing Out Your Pricing Strategy)


Today's Guest

What You'll Learn

The price you set for your products/services can be one of the most important decisions you make. Setting your prices too high or too will seriously limit your business growth. But what if the very pricing strategy you carefully selected is the thing that actually works against you?

My guest today is John Wallace, founder of TS3. Since John comes from a background in sales the last thing I thought I’d hear from him was to suggest business owners throw out their pricing strategy. When I heard John suggest throwing out your pricing strategy during a meeting in Essex, I wanted to know more.

Was this some kind of weird Jedi trick? Was this another “pay me what you think I’m worth” approach that I’ve had a dozen times over and ends up in zero credibility?

As it turns out, it was neither of those things.

Instead, what John was advocating is to have a more intelligent conversation about your products/services – one that focuses on value rather than price.

The Difference Between Cost and Value

Knowing the difference between cost and value is important.

  • The cost is the amount you spend in order to produce and deliver your products/services.
  • The value is what the customer believes your product or service is worth to them.

Since we all have different needs and desires, the perception of value can vary from one person to another. It’s this difference in perception that I was to discover was at the heart of John’s argument on removing your pricing structure from any sales conversation.

Only when we know the difference between cost and value are we in an optimum position to set price.

To be fair, John isn’t saying completely ditch your pricing strategy. Your pricing strategy helps to work as a guide in a sales conversation. It can only ever be a guide because at the time you set your prices you hadn’t spoken with your prospect and learned the value they would place on your product or service.

Your pricing strategy can be a like a comfort blanket, says John. It can give you confidence when starting out, but ultimately it ends up holding you back on profitability.

Putting it into action

This is a thought-provoking episode. If you’re literally just starting out with your business, you may want to still work to your pricing strategy for the moment – at least until you pick up confidence. Do though listen to the episode because John does a really great job of driving home the message about value. This alone will help you gain greater confidence in sales meetings.

On the other hand, if your business is further along definitely give this approach a go. Not only will you bring in some higher paying clients, but you’re also likely to close more deals.

Links mentioned in this episode:

Note: Some of the resources below may be affiliate links, meaning I get paid a commission (at no extra cost to you) if you use that link to make a purchase.

Hey, Thanks for Listening

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Special thanks to John Wallace for joining me this episode. Until next time!

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